The share price of several major UK retailers surged on Thursday following the government’s announcement of a £15bn package of support for struggling households.
Shares in Ocado jumped up 12.2% over the course of the day, M&S recorded an 8.6% increase, B&M was up 7.7%, while ABF (the owner of Primark) saw its shares grow by 4.9%.
The package will give each UK household a £400 discount on their energy bills this October. The move, which will also see energy companies being levied with a one-off £5bn tax. The announcements came as inflation in the UK has soared to a 40-year-high, ratcheting up pressure on household spending.
The announcement has raised hopes that cash-strapped households will increase their spending, especially in the key autumn and winter months.
NAM Implications:
- A normal response by the stock market…
- i.e. a dead cat bounce?
- The recipient households need the money for essentials.
- …not extras.
